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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Suppose you are about to buy a car and ask to see a vehicle history report to check previous accidents or problems reported for that car. When you are told that this information is not available, you decide not to buy the car.
a) Do you think this example illustrates an adverse selection or moral hazard problem?
b) What is the lesson about the lack of information and the probability that a transaction will occur?
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